Recession indicators can be abstract, but not when it comes to dining. Usually, restaurant spending stays positive even during a financial recovery period, even as other economic segments like retail are dropping. So, when restaurant sales turn downward, it means a great deal and can indicate a real problem. The recent Stifel Sales Survey indicates that the restaurant downturn could be the start of a U.S. Restaurant Recession. Reduced success in dining can affect other areas, and analyst Paul Westra notes that “restaurants have historically led the market lower during the three to six-month periods prior to the start of the prior three U.S. recessions.”
Economists are keeping a close eye on restaurant earnings in hopes that history does not repeat itself. For the full article from Bloomberg, click here.